Lodi, Calif.—Every grapegrower would like to sell their grapes at a higher price. Some factors affecting grape prices are beyond a grower’s control, such as wine market conditions and trends, supply and demand and general economic factors. But as pointed out at a recent Lodi Winegrape Commission (LWC) meeting about premiumization, a grower can take the initiative to change farming practices to increase quality and raise the bar, do market research, target potential buyers and make contacts to improve sales opportunities and prices.

Premiumization is a major LWC initiative and educational topic, and Lodi growers are very interested in understanding the differences between commodity and premium grapegrowing in today’s market. Industry panelists with experience selling and buying grapes provided advice to Lodi growers for both entering and expanding opportunities in the premium wine grape market.

Jeff Bitter, vice president of Fresno, Calif.-based Allied Grape Growers, has a statewide perspective representing growers as a marketer and seller of grapes to wineries. In 2017, Allied brokered grapes priced as high as $9,000 per ton for Cabernet Sauvignon from Atlas Peak in Napa. Bitter said the premiumization conversation is not unique to Lodi. “This discussion is happening in every region in the state, and some regions struggle with their identity in the marketplace,” he said. “I don’t think Lodi has that problem to the degree other regions do, because the LWC has done a great job marketing, and Lodi has a greater and more consistent supply of grapes compared with other regions.”

Bitter said current market trends are favorable. Wine sales are good at prices between $7 and $10 per bottle, he said, and there is consistent market growth at prices above $10 per bottle. Noting that costs are going up for grape production, particularly in California’s coastal areas, there is opportunity in Lodi to provide grapes at prices people want. “Buyers are willing to pay more for consistent quality grapes, but they want to bring their overall costs down, and Lodi is in a good position to help them do that,” Bitter said.

Regardless of market conditions, Bitter advised, “You as a grower have to take the first step. Be proactive to make changes in the vineyard to take your grapes to the next level.” Panelists advised growers to take small steps by farming a small block, or two or three rows, differently with a focus on improving quality. Bitter suggested, “Then make wine from this block. Sometimes that’s what you have to do to understand what your vineyard can do.”

To make improvements at the vineyard level, Bitter said growers need to be more involved on a day-to-day basis and understand their operational costs to improve quality and the bottom line. Growers must know what their grapes are worth and what it costs to produce them. “It’s not that you have to farm like they do in Napa, but taking steps to improve your game and not focusing so much on yield,” Bitter said, suggesting “putting more emphasis on vine balance.”

LWC program manager Stuart Spencer is also a grower and wine producer with his family-owned St. Amant Winery in Lodi. Spencer advised: “Do your research. Find out what wineries are interested in and target those that may want what you have to sell. Visit their wineries and tasting rooms to see how they make their wine and learn about their wine styles. Go to tastings and events where the winemakers and owners are present and make contacts. Learn the language and process of winemaking.”

Spencer pointed out that Lodi has 85 local wineries, most producing smaller volumes of premium-priced wines that showcase local grapes and different varietals. He suggested finding a local winemaker and giving them 2 tons of fruit to try in exchange for 20 cases of the resulting wine that the grower can use to showcase and market their vineyard. Spencer noted Lodi is becoming known as a source of alternative varietals that may not be available in significant quantities from elsewhere in California, such as Spanish, Portuguese and German cultivars. “Sometimes those oddball varietals can open up doors for you,” Spencer said. Well-known winemakers from other regions are making vineyard-designated Lodi wines from many different grape varieties.

Markus Niggli is a winemaker and grape buyer with Borra Vineyards, and a producer of premium wines under his own label Markus Wine Co. Borra Vineyards has a long history of selling small quantities of grapes to out-of-state winery buyers, who don’t always have a dependable grape source due to variable weather. Niggli works with these buyers to provide the quality they want from Borra-produced grapes, and from grapes sourced from other Lodi vineyards. Niggli also purchases grapes from Lodi growers to make premium wines under his Markus label, notably German varieties grown by the Koth family of Mokelumne Glen Vineyards.

Niggli said his out-of-state winery buyers commonly visit the Lodi vineyards blocks they buy from every year. “They are glad to have a California grower to deal with; they depend on the grower to give them something with rock-solid quality, and I try to give them top-notch fruit,” Niggli said. He advised, “Be honest and be proud of what you do. We have a good reputation in Lodi of being among the best growers in California.”

What makes a ‘premium’ vineyard?
Bitter said, “Put yourself in the shoes of the buyer. If Allied has a buyer interested in Lodi fruit, we won’t take them to every vineyard we represent. We show the buyer vineyards that are presentable and will match the quality they want.” He advised growing canopies appropriate to the crop load and doing leaf pulling and shoot thinning to expose fruit to improve quality. “I’ve heard growers say they won’t do these operations unless the buyer pays for them. It’s like a chicken-and-egg situation, but the reality is you have to start doing these things in order to get higher prices.”

Older vineyards may show signs of virus or disease with a mix of colors and grape maturity issues. “Buyers don’t want virused fruit, and a vineyard with virus issues is not a candidate for premiumization. If you have a block like that, it’s time to consider redevelopment,” Bitter said.

Niggli observed, “What a premium vineyard looks like to me is a canopy that’s not too vigorous, commonly with 2 to 3 clusters per shoot, and it has a very proud owner walking the vineyard with me who says, ‘This is the best you can buy for this price,’ and says he stands behind his product.”

Sustainable certification is another avenue to potentially increase grape prices. Spencer listed four wineries that pay higher premiums for grapes farmed under the Lodi Rules for Sustainable Winegrowing Program: Michael David Winery and LangeTwins Family Winery and Vineyards in Lodi, Bogle Winery in Clarksburg, and Francis Ford Coppola Winery in Geyserville.

Growers were advised to take a realistic look at themselves and their operation and determine if premiumization is practical. Some growers may prefer selling their entire production on a commodity basis to one large winery rather than dealing with multiple wineries and buyers who may want to visit their vineyards on a regular basis and request specific farming practices.

“Premiumization is not for everybody,” Bitter said. “Keeping everything consistent in your vineyard may be more suited to your goals and your operation’s economics.” Bitter recently wrote an informative article for the Lodi Winegrape Commission: Premiumization—What’s it mean for Lodi?

Spencer said the LWC plans to have future programs on how to tell the Lodi story and on vineyard branding. “The vineyard is the focus of marketing for a lot of premium wines and wine brands today,” Spencer said. “When you sell your grapes, you’re selling yourself as well as selling your vineyard.”